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Thursday May 23rd, 2024

Sri Lanka’s Softlogic says restructuring debt, seeking investors for hotels, ODEL

ECONOMYNEXT – Sri Lanka’s Softlogic group has begun restructuring its debt and is seeking investors for hotels and ODEL retail project, while also selling off assets, according to its annual report for the year to March 2023.

Softlogic group, which has interests in retail, hotels, finance and healthcare, posted a loss of 24.07 billion rupees for the year to March 2023, up from 8.1 billion a year earlier.

Group revenues including insurance fell to 96.8 billion rupees from 111.2 billion rupees, according to accounts qualified by the auditors.

Net finance costs were 20.9 billion rupees as interest rates rose on the heavily leveraged group. Forex losses of 4.0 billion contributed to the finance costs.

The group had 42 billion rupees in long term borrowings by end March 2023, up from 38.6 billion and overdrafts of 9.3 billion, up from 6.6 billion rupees.

The group is trying to raise cash and cut borrowings.

“One key strategy is the disposal of identified assets, phasing out certain sectors of the Group, and infusing equity,” Chairman Ashok Pathirage told shareholders.

“We are also exploring alternative financing sources, including sector-specific equity in Retail and Healthcare Services.”

The group was looking to sell its hotels including Colombo’s Movenpick or get equity investors. Investors were also sought for ODEL Mall project, which is partially built.

“Recent revival in the country’s economy have reinvigorated talks with crucial investors, whose decisions are pending until the country concludes its foreign debt restructuring programme,” Pathirage said.

“Furthermore, as an immediate measure to ease the Group’s liquidity, we are renegotiating debt repayment plans with lending institutions and restructuring them pending our fundraising activities.”

About 1.2 billion rupees in interest waivers have been negotiated and 11 billion rupees in debt have been re-structured, the firm said.

About 3.5 billion rupees of other assets have been earmarked for sale.

Softlogic Holdings has announced a 10 billion rupee share and warrant offer.

Key shareholders, Pathirage and Samena Ceylon Holdings Limited have indicated that they will subscribe to the shares and warrants, the annual report said.

Softlogic’s auditors have qualified the accounts on 125 million rupees allocated to a suspense account after changes were made to the accounts of a subsidiary.

A loss of 23.6 billion in the yar to March 2023, for the year ended 31 March 2023 and as of that date,

The group’s current liabilities exceeded current assets by 70.597 billion by March 2023, reported losses were 51.5 billion rupees and net assets were negative by 17.8 billion rupees.

As a result “a material uncertainty exists which may cast significant doubt on the Group’s ability to continue as a going concern without continued financial support from the financial institutions,” auditors said.

Auditors also highlighted several ‘key audit matters’ relating to revenue recognition, classification of borrowings, insurance liabilities, credit losses, carrying value of the ODEL Mall project and possible impairments. (Colombo/Apr20/2024)

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Sri Lanka to speed up and expand Bingiriya export zone

ECONOMYNEXT – Sri Lanka is expanding an export processing zone in Bingiriya in Kurunegala and plans to link the area with Puttalam with roads and other infrastructure, Minister Bandula Gunawardana said.

A task force of ministerial secretaries will be appointed to carry out the tasks speedily, following a cabinet paper submitted by President Ranil Wickremesinghe said.

The Bingiriya zone already has 157 acres and another 282 acres is being developed by the Board of Investment, he said.

Steps would also be taken to acquire 666 acres.

There was no information whose lands would be acquired. (Colombo/May23/2024)

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Sri Lanka has power breakdowns amidst extreme weather

ECONOMYNEXT – The state-owned power utility, the Ceylon Electricity Board has reported over 36,900 breakdowns resulting in power interruptions to more than 300,000 consumers in the last three days due to inclement weather in the island, the power minister said.

“Additional service staff has been assigned to attend the breakdowns and the CEB management & service staff are working 24 hours to restore power to the affected consumers,” Minister of Power and Energy, Kanchana Wijesekera said on social media platform X (twitter).

Wijesekera said consumers could report power interruptions through the CEB hotline 1987, via SMS to 1987 with BD and the electricity consumer number to follow, or use the CEB Care app, or through http://cebcare.ceb.lk.

The South-East monsoon has seen floods, landslides and strong winds do damage to the utility provider’s infrastructure in the last week. (Colombo/May23?2024)

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Sri Lanka President calls for unity, sacrificing for a better tomorrow on Vesak day

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe has recalled a sermon from the Buddha about sacrificing for a better tomorrow, and called for unity to heal and rebuild the country, as Buddhists celebrate Vesak.

Buddhists celebrate Vesak as commemorating the birth, enlightenment and passing away of the Buddha.

“At this challenging moment, we as a nation should cultivate the same great zeal for enlightenment that Buddha exemplified, inspired by his sermon, “Maththasukha parichchaga- passé che vipulan sukhan” – to sacrifice today for a better tomorrow,” President Wickremesinghe said in his Vesak day message.

“We must remember the advice of Lord Buddha, “Sabbattha Sammanaso,” to treat everyone equally and ensure we put it into practice as a country. This is the greatest offering we can present to the Buddha on this Vesak day.

“Regardless of race, religion, caste, or political affiliation, we must all unite to heal and rebuild our country. ”

The full statement is reproduced below:

The Vesak festival is a profoundly sacred day for Buddhists worldwide, commemorating the Buddha’s birth, enlightenment, and passing. Buddhists in Sri Lanka, along with their brethren around the globe, celebrate Vesak with deep devotion. They spend this period engaging in religious observances and venerating the Buddha with fervent devotion.

At this challenging moment, we as a nation should cultivate the same great zeal for enlightenment that Buddha exemplified, inspired by his sermon, “Maththasukha parichchaga- passé che vipulan sukhan” – to sacrifice today for a better tomorrow.

We must remember the advice of Lord Buddha, “Sabbattha Sammanaso,” to treat everyone equally and ensure we put it into practice as a country. This is the greatest offering we can present to the Buddha on this Vesak day. Regardless of race, religion, caste, or political affiliation, we must all unite to heal and rebuild our country. The principles of Lichchavi Raja Dharmaya will guide us in this endeavour.

Let us keep in mind that the primary aim of the Vesak festival is to foster spiritual growth and character development in a world rapidly advancing physically. I wish everyone a blessed Vesak festival.

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